Calculate how long your retirement corpus will last with systematic withdrawals
A Systematic Withdrawal Plan (SWP) Calculator is a financial tool that helps you plan regular withdrawals from your mutual fund investments while accounting for market returns and inflation. Unlike traditional retirement calculators that only show lump-sum scenarios, an SWP calculator simulates month-by-month withdrawals to give you a realistic picture of how long your retirement corpus will last.
In India, SWP has become increasingly popular among retirees and FIRE (Financial Independence Retire Early) enthusiasts who want to generate regular income from their investments without depleting their corpus too quickly. The SWP calculator India version typically includes features like inflation adjustment, step-up withdrawals, and tax implications specific to Indian mutual funds.
When you set up an SWP, you invest a lump sum into a mutual fund and authorize the fund company to automatically redeem units worth a specified amount at regular intervals (usually monthly). Here's the process:
The best SWP calculator accounts for three critical forces acting on your corpus: market returns (growth), withdrawals (outflow), and inflation (purchasing power erosion). Our SWP calculator with inflation shows both nominal withdrawals (actual rupees received) and real withdrawals (purchasing power in today's terms).
Traditional retirement calculators often use simplified assumptions like "4% withdrawal rule" or flat percentage withdrawals. An SWP calculator India provides month-by-month simulations that account for:
The biggest mistake retirees make is ignoring inflation when planning their SWP. A fixed ₹40,000 monthly withdrawal might feel comfortable today, but after 15-20 years of 6% inflation, its purchasing power could drop by more than 60%. This is why an SWP calculator with inflation is essential for realistic retirement planning.
Rajesh retired in 2005 with ₹50 lakhs and set up an SWP of ₹25,000/month (fixed). In 2005, this covered his monthly expenses comfortably. By 2025, with average 6.5% inflation, that same ₹25,000 has the purchasing power of only ₹7,100 in 2005 terms. His lifestyle had to shrink by 71%!
Solution: An inflation-adjusted SWP that increases 6% annually would have grown to ₹86,000/month by 2025, maintaining his original purchasing power.
Withdraw the same amount every month/year. Simple but dangerous—your real income shrinks every year due to inflation.
Increase your withdrawal by inflation rate each year. Maintains purchasing power but depletes corpus faster if returns < inflation + withdrawal rate.
Start with higher withdrawals and reduce over time, or use dynamic withdrawal rates (like 4% rule). Adapts to portfolio performance.
Our calculator uses this month-by-month formula to simulate your SWP:
This is why a proper SWP calculator SBI or any systematic withdrawal plan calculator must run month-by-month simulations rather than simple annualized formulas. Market returns compound monthly, withdrawals happen monthly, and inflation compounds annually.
Want to build your own SWP calculator? Here's a complete Excel implementation with formulas you can copy-paste. This DIY approach gives you full control and helps you understand exactly how your retirement corpus depletes over time.
| Cell | Parameter | Example Value | Formula (if needed) |
|---|---|---|---|
| B2 | Initial Corpus (₹) | 5,000,000 | — |
| B3 | Annual Return (%) | 10% | — |
| B4 | Monthly SWP Start (₹) | 40,000 | — |
| B5 | Annual SWP Increase (%) | 6% | — |
| B6 | Inflation (% p.a.) | 6% | — |
| B7 | Tenure (Years) | 25 | — |
| B8 | Monthly Return | 0.797% | =(1+B3)^(1/12)-1 |
| B9 | Total Months | 300 | =B7*12 |
Starting from row 12, create these column headers:
| A | B | C | D | E | F | G | H | I |
|---|---|---|---|---|---|---|---|---|
| Month # | Year # | Opening Balance | Return | Withdrawal | Closing Balance | Cumulative | Opening (Real) | Withdrawal (Real) |
| A13 (Month): | =1 |
| B13 (Year): | =INT((A13-1)/12) |
| C13 (Opening): | =$B$2 |
| D13 (Return): | =C13*$B$8 |
| E13 (Withdrawal): | =$B$4*(1+$B$5)^B13 |
| F13 (Closing): | =C13+D13-E13 |
| G13 (Cumulative): | =E13 |
| H13 (Real Opening): | =C13/(1+$B$6)^B13 |
| I13 (Real Withdrawal): | =E13/(1+$B$6)^B13 |
For row 14, update only these formulas (others remain the same):
| A14: | =A13+1 |
| C14 (Opening): | =F13 (previous month's closing becomes current month's opening) |
| G14 (Cumulative): | =G13+E14 |
Now drag all formulas down to row 312 (for 300 months / 25 years). You'll see your corpus deplete month-by-month!
Given corpus, return, and tenure:
=-PMT(B8, B9, B2, 0, 0)
Returns max monthly withdrawal
Given desired monthly SWP:
=-PV(B8, B9, B4, 0, 0)
Returns required starting corpus
⚠️ Note: PMT and PV formulas assume fixed payments and don't account for annual step-ups or inflation adjustments. For realistic inflation-linked SWP calculations, always use the month-by-month simulation approach shown above.
Choosing the right SWP strategy can mean the difference between running out of money at 75 or living comfortably until 95. Here are the most effective strategies used by successful retirees in India:
The classic 4% rule says you can withdraw 4% of your initial corpus annually (adjusted for inflation) and your money should last 30+ years. For India, financial advisors recommend a more conservative 3-3.5% rule due to higher volatility in Indian markets.
Example: With a ₹1 crore corpus, withdraw ₹3 lakhs/year (₹25,000/month) in year 1. Increase this by inflation each year. Based on historical data, this gives you 90%+ probability of your corpus lasting 30 years.
Divide your corpus into 3 buckets with different investment horizons:
Amount: 3 years of expenses
Investment: Liquid/Ultra Short Duration Funds
Purpose: Fund your SWP withdrawals
Amount: 4 years of expenses
Investment: Hybrid/Balanced Advantage Funds
Purpose: Refill Bucket 1 annually
Amount: Remaining corpus
Investment: Equity Mutual Funds/Index Funds
Purpose: Long-term growth to beat inflation
Instead of pure SWP, combine dividend-paying stocks/funds with SWP from growth funds. This gives you:
Adjust your withdrawal rate based on portfolio performance:
Use the Groww SWP calculator or this SWP calculator to model different strategies and see which one gives you the best balance between income needs and corpus longevity.
Not all mutual funds are suitable for SWP. The best SWP calculator results mean nothing if you pick high-volatility funds. Here are the ideal fund categories for systematic withdrawals:
| Fund Category | Risk Level | Expected Return | Best For |
|---|---|---|---|
| Hybrid Aggressive Funds | Moderate | 10-12% | Primary SWP vehicle for most retirees |
| Balanced Advantage Funds | Low-Moderate | 9-11% | Conservative retirees, 65+ age |
| Multi-Asset Allocation | Low-Moderate | 8-10% | Very conservative, diversification seekers |
| Equity Index Funds | High | 12-14% | Long-term bucket (7+ years), early retirees |
⚠️ Disclaimer: Past performance does not guarantee future results. Always consult a SEBI-registered financial advisor before making investment decisions. Fund recommendations change based on market conditions.
Setting up an SWP is simple through online platforms. Here's the general process:
Before finalizing, use this SWP calculator India to verify your withdrawal amount is sustainable for your desired retirement period.
SWP is one of the most tax-efficient ways to generate retirement income in India. Understanding the tax treatment can save you lakhs over your retirement. Here's how SWP taxation works:
Each SWP withdrawal is treated as a redemption/sale of mutual fund units. Tax is applicable only on the capital gains portion, not the entire withdrawal amount.
Example: You withdraw ₹40,000 from your mutual fund. The units you redeem have:
| Fund Type | Holding Period | Tax Rate | Indexation |
|---|---|---|---|
| Equity Funds | < 1 year (STCG) | 20% | No |
| Equity Funds | > 1 year (LTCG) | 12.5% (exemption up to ₹1.25L/year) | No |
| Debt Funds | < 3 years (STCG) | As per income tax slab | No |
| Debt Funds | > 3 years (LTCG) | As per income tax slab | No (removed from 2023) |
| Hybrid Funds | Depends on equity % | Equity taxation if >65% equity | — |
Use the SWP calculator with inflation above to estimate your post-tax income and ensure you're withdrawing the right amount to stay within lower tax brackets.
Step 1: Determine the NAV at purchase and NAV at redemption
Step 2: Calculate capital gain = (Redemption NAV - Purchase NAV) × Units redeemed
Step 3: Check holding period (STCG or LTCG)
Step 4: Apply appropriate tax rate
Step 5: For equity LTCG, subtract ₹1.25L exemption from annual gains
Most mutual fund platforms automatically calculate this using FIFO (First In First Out) method and generate tax statements annually.
An SWP calculator is essential for anyone planning to live off their investments. Here are the specific scenarios where using this calculator becomes critical:
Use the systematic withdrawal plan calculator to work backwards:
For FIRE enthusiasts retiring at 40-45, the SWP needs to last 40-50 years. The calculator helps you:
Received ₹50 lakhs - ₹2 crores from property sale, inheritance, or business exit? The SWP calculator SBI or this calculator helps you:
Planning a 1-2 year career break? Use the calculator to:
Before locking money into annuities or fixed deposits, use this calculator to compare:
| Strategy | Pros | Cons | Best For |
|---|---|---|---|
| SWP from MF | Flexible, tax-efficient, inflation-beating returns | Market risk, requires monitoring | Age 50-70, moderate risk tolerance |
| Annuities | Guaranteed income, no market risk | Irreversible, poor inflation protection, high cost | Age 70+, very low risk tolerance |
| FD Laddering | Safe, predictable, DICGC insured | Low returns (6-7%), doesn't beat inflation | Emergency corpus, very short-term needs |
"The stock market is a device for transferring money from the impatient to the patient." — Warren Buffett
This applies equally to retirement withdrawals. Patient, systematic withdrawals with this SWP calculator help preserve wealth across generations.
A SWP (Systematic Withdrawal Plan) calculator is a financial planning tool that simulates month-by-month withdrawals from your mutual fund corpus. It accounts for market returns, inflation, and annual withdrawal increases to show you exactly how long your retirement savings will last. The calculator uses compounded monthly returns and tracks both nominal (actual) and real (inflation-adjusted) values to give you a realistic retirement income projection.
To calculate your ideal SWP amount, follow these steps:
SWP taxation is based on capital gains, not the entire withdrawal. Each withdrawal is treated as redemption: Tax = (NAV at redemption - NAV at purchase) × Tax rate. For equity funds held over 1 year, LTCG tax is 12.5% with ₹1.25L annual exemption. For debt funds, gains are taxed at your income tax slab rate. Only the profit portion is taxed—return of your own capital is tax-free, making SWP highly tax-efficient compared to dividends.
The best SWP plans for retirement are:
Avoid pure equity funds for SWP as volatility can deplete your corpus faster during market downturns. Hybrid funds provide the best balance of growth and stability.
SWP is significantly better than dividends for retirement income. SWP offers: (1) Tax efficiency – only capital gains taxed, not entire amount; (2) Control – you decide withdrawal amount and timing; (3) LTCG benefits – 12.5% tax rate with ₹1.25L exemption vs dividends taxed at slab rate up to 30%; (4) Flexibility – can pause, increase, or decrease withdrawals. Dividends are fully taxable, unpredictable, and offer no control. SWP can save lakhs in taxes over a 20-30 year retirement.
For ₹50,000/month (₹6 lakhs/year) inflation-adjusted SWP to last 25-30 years, you need approximately ₹1.7-2 crores. This assumes 10% annual returns, 6% inflation, and 6% annual SWP increase. Using the 3.5% rule: Required corpus = Annual SWP / 0.035 = ₹6L / 0.035 = ₹1.71 crores. For more conservative planning or longer retirement (35+ years), aim for ₹2-2.5 crores. Use the SWP calculator above to test different scenarios.
Yes, setting up SWP from multiple funds is recommended for diversification. The bucket strategy uses 3 funds: (1) Liquid/Ultra Short Duration for immediate 3-year needs, (2) Hybrid/Balanced Advantage for 3-7 years, (3) Equity funds for 7+ years. This approach reduces sequence of returns risk and ensures you're not forced to sell equity during market downturns. You can set different SWP amounts and frequencies for each fund based on your cash flow needs.
The 4% rule states you can withdraw 4% of your initial corpus annually (adjusted for inflation) and your money should last 30+ years. However, for India, financial planners recommend a conservative 3-3.5% rule due to higher market volatility and longer life expectancy. With ₹1 crore corpus: 4% rule = ₹4 lakhs/year, but safer 3.5% rule = ₹3.5 lakhs/year. This lower rate increases probability of your corpus lasting 30-40 years even during prolonged bear markets.
To set up SWP in SBI Mutual Fund:
SWP can be modified or stopped anytime. First withdrawal happens after 30 days of request.
SWP from well-diversified hybrid/balanced funds is reasonably safe for retirement when planned correctly. Risks include market volatility, sequence of returns risk (retiring before a crash), and inflation erosion. Mitigate by: (1) Using bucket strategy with 3-5 years in debt, (2) Withdrawing conservative 3-3.5% annually, (3) Increasing withdrawals by inflation rate, (4) Monitoring and rebalancing annually. SWP is safer than 100% equity but riskier than annuities. For most retirees 55-70, hybrid fund SWP offers best risk-reward balance.
To build an SWP calculator in Excel, create columns for: Month, Year, Opening Balance, Monthly Return, Withdrawal, Closing Balance. Key formulas:
See the "How to Calculate SWP in Excel" section above for complete step-by-step formulas with cell references.
To prevent corpus depletion: (1) Use conservative 3% withdrawal rate, (2) Keep 5-year emergency buffer in debt funds, (3) Be flexible – reduce withdrawals during bear markets, (4) Have backup income (pension, rental, part-time work), (5) Consider annuitizing 20-30% of corpus at age 70+ for guaranteed income floor. If corpus starts depleting earlier than planned, immediately reduce SWP by 20-30%, switch to more conservative funds, or activate backup income sources. Regular monitoring (annual reviews) helps catch problems early.